Fidelity Advisor^® Energy Portfolio: Investment Approach

• Fidelity^® Select Energy Portfolio is a sector-based, equity-focused strategy that seeks to outperform its benchmark through active management.
• We believe stocks can become mispriced relative to intrinsic value for a variety of reasons, including cyclically depressed earnings or overly positive or negative sentiment.
• Supported by in-depth fundamental research, we seek to uncover investment opportunities by analyzing the drivers of supply and demand for energy commodities, in combination with valuations and cash-generation potential for energy stocks.
• Our process is grounded in the belief that the ability to generate free cash flow over time is the best barometer of value, and that companies with quality businesses trading at attractive levels compared with future free-cash-flow generation tend to outperform.
• Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes.